The Santa Claus Rally and the Christmas Club

By Wordwide FX Financial Translations (wordwidefx.com)

Via Investopedia (investopedia.com)

Christmas also has an impact on the financial markets. Santa Claus makes the price of stocks move up, and banks have their hayday by giving credits to consumers who need to buy presents for their families and friends. Let's see what Investopedia tells us on these two concepts...

A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations for the Santa Claus Rally phenomenon, including tax considerations, happiness around Wall Street, people investing their Christmas bonuses and the fact that the pessimists are usually on vacation this week. Many consider the Santa Claus rally to be a result of people buying stocks in anticipation of the rise in stock prices during the month of January, otherwise known as the January effect.

And what is a Christmas Club in the financial industry? Well, Because of the tremendous pressure put on people to save money for Christmas spending and the debt loads that consumers incur just before the holidays, many financial institutions offer their customers Christmas club accounts. Usually, Christmas club accounts offer systematic savings through automatic withdrawal upon deposit of paychecks to a checking account.